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TMI Blog2004 (2) TMI 135X X X X Extracts X X X X X X X X Extracts X X X X ..... limitation under Section 11A of the Central Excise Act, 1944 to demand Central Excise duty of Rs. 12,29,511/- from M/s. Sarpin Pharmacal (appellants in Appeal No. E/1310/2001) for the period April 1988 to July 1989. The demand was on two products viz. "Merizyme Elixir" and "Merizyme Drops" which had been cleared during the said period by the said appellants on payment of duty at the concessional rate of 5% ad valorem under SSI Exemption Notification No. 175/86-C.E., dated 1-3-86 (as amended), to M/s. Mercury Laboratories Pvt. Ltd., Baroda [hereinafter referred to as 'M/s. MLL']. It was alleged that the benefit of SSI exemption was not admissible to the goods (which had allegedly been cleared under the brand-name of another person [M/s. MLL ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and Rs. 20,000/- respectively on Sh. N.B. Desai and Sh. K.D. Patel under Rule 209A. Hence the appeals. 2. Heard both sides. Learned counsel submitted that the appellant-firm was registered as an SSI unit under the Industries (Development and Regulation) Act and was also registered as a manufacturing unit under the Drugs and Cosmetics Act; that, throughout the period of dispute, the medicines "Merizyme Elixir" and "Merizyme Drops" and their formulae had remained registered in the name of the firm under the Drugs and Cosmetics Act and stood recognized as the appellants' product in the trade; that the appellants had acquired the brand-names 'Merizyme Elixir' and 'Merizyme Drops' from M/s. MLL for a royalty under agreement dated 6-1-1988 and h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e to time and the same were approved by the proper officer of Central Excise. They had also filed price lists which were also approved. The RT 12 returns filed by them for the relevant period were also assessed finally by the proper officer without raising any objection. All queries of the department were satisfactorily answered. If the agreement dated 6-1-88 was not disclosed to the department, it was only because the said agreement was never implemented. Therefore, there was no justification in invoking the larger period of limitation. Counsel submitted that, in the absence of mens rea, penalty was also not warranted in the case. It was also contended that, when the firm was penalized, its partners were not liable to be penalized separate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the goods were cleared under their own brand-names. The respondent's case is that the goods were cleared under the brand-names of the buyer viz. M/s. MLL who were themselves not eligible for the benefit of the Notification and, therefore, in respect of the goods, SSI exemption was barred by Paragraph 7 of the Notification. The said para 7 reads :- "7. The exemption contained in this notification shall not apply to the specified goods where a manufacturer affixes the specified goods with a brand name or trade name (registered or not) of another person who is not eligible for the grant of exemption under this notification." The question now is : Who was the owner of the brand-names "Merizyme Elixir" and "Merizyme Drops" - the appellant-firm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nted. He also admitted that the formula of the two medicines were registered in the name of M/s. MLL. It is clear from this oral evidence coupled with the terms & conditions of the above agreement that the brand-names were owned by M/s. MLL. This position is not deniable by the appellants who have admitted the legal status of M/s. MLL in relation to the brand-names. Any permission by Drugs Control authorities to the appellants to produce the medicines had nothing to do with ownership and/or user of the brand-names, which was the concern of the competent authority under the Trade & Merchandise Marks Act. In this case, admittedly, the appellants applied to the Trade Marks authority for registration of the brand-names in their favour only in 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Commissioner has not examined the limitation issue. However, we are not inclined to remand the case on this score in view of the fact that this two-decade-old case has already suffered a number of remands. The show cause notice invoked the larger period of limitation, alleging inter alia that the appellant-firm had suppressed from the department the fact that they had cleared the goods in question under brand-names owned by another person, who was not eligible for the benefit of Notification No. 175/86-C.E. (as amended). We find that this allegation stands proved in this case. The appellant-firm was aware of the fact that the brand-name belonged to M/s. MLL. This knowledge dates back, at least, to 6-1-88, the date on which they signed th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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